For two decades, India’s contract development and manufacturing organisations built their global reputation on a simple proposition: reliable small-molecule generics and active pharmaceutical ingredients, made at a fraction of Western cost. That proposition is now being tested by a modality shift sweeping through global biopharma, and the industry’s response over the next three years will determine whether India’s CDMO sector graduates into genuine biologics leadership or settles for a permanent role as the world’s cost-effective back office.
The shift is visible in sponsor demand. Pharmaceutical innovators are moving away from conventional small molecules toward peptides, oligonucleotides and antibody-drug conjugates (ADCs) — modalities that demand deeper process expertise, tighter analytical control and capital-intensive facilities that cannot simply be retrofitted from existing plants. This is forcing Indian CDMOs to make a choice: invest heavily to compete in complex biologics, or cede that ground to established players in South Korea, Switzerland and the United States.
Hyderabad-based Neuland Laboratories has placed its bet unambiguously. The company is set to commission a new commercial-scale peptide manufacturing facility at its 17-acre Bonthapally campus this summer, the first of four planned modules designed to scale from clinical to multi-ton commercial volumes. Module One alone has secured firm client commitments of roughly $30 million and will add 6,370 litres of combined solid-phase and liquid-phase peptide synthesis capacity — reactors sized to handle everything from small experimental batches to industrial-scale runs. Crucially, Neuland has positioned the facility to serve the surging GLP-1 market, the weight-loss and diabetes drug category that has become the single largest driver of global peptide manufacturing demand. Vice Chairman and Managing Director Saharsh Davuluri has said the site was deliberately designed for continued expansion as client needs grow, with room for additional synthesisers and reactors as future modules come online.
Neuland’s move sits inside a much larger consolidation story. Samsung Biologics, the South Korean CDMO giant, has launched an all-cash tender offer worth approximately $1.8 billion (CHF 1.46 billion) to acquire PolyPeptide Group, a Swiss peptide-API specialist with more than seventy years of manufacturing history and over 1,000 therapeutic peptides to its name. The acquisition — the largest in Korean pharmaceutical history — would fold PolyPeptide’s six facilities across Europe, the United States and India into Samsung’s biomanufacturing network. That Indian facility, in Ambernath, Maharashtra, instantly becomes strategically significant: once the deal closes, expected toward the end of 2026 subject to regulatory approval, one of India’s established peptide-API plants will operate as a node inside a global CDMO platform valued in the tens of billions of dollars, rather than as an independent contractor competing on price alone.
The juxtaposition of these two developments — an Indian company building new capacity from the ground up, and a global giant absorbing an existing Indian facility into its network — captures the two paths open to India’s biologics sector. One is organic capability-building aimed at capturing high-value peptide and ADC manufacturing directly. The other is integration into multinational supply chains where India supplies capacity and cost advantage while intellectual and commercial control remains offshore.
Industry rankings continue to place India in what analysts describe as a “regional powerhouse” CDMO tier, prized chiefly for cost advantage rather than technological leadership in advanced modalities. That framing is not unfair, but it is not fixed either. The global peptide CDMO market is forecast to grow at over 20 percent annually through the mid-2030s, driven largely by GLP-1 therapeutics and an expanding oncology and metabolic peptide pipeline. Capturing a larger share of that growth — rather than merely servicing it as a subcontractor — is the strategic prize India’s CDMO sector is now chasing.
What would genuine leadership look like, as opposed to cost-tier participation? It would mean Indian CDMOs owning process-development intellectual property for complex modalities rather than merely executing client-designed processes; building analytical and regulatory depth to support first-in-class biologics rather than biosimilars alone; and attracting innovator-stage partnerships — not just late-stage manufacturing contracts — that place India inside the drug-discovery value chain rather than at its tail end. Neuland’s stated focus on emerging biotech firms facing tight clinical-manufacturing access suggests an attempt at exactly this earlier-stage engagement.
There is also an analytical-capability dimension that gets less attention than headline capital figures. Complex peptides and ADCs cannot be manufactured reliably without equally sophisticated quality-control infrastructure — advanced chromatography and the kind of real-time process analytics regulators in the US and Europe now expect as standard for advanced-modality filings. CDMOs that thrived on small-molecule cost advantage have not always needed this depth of analytical science in-house; the pivot to biologics makes it unavoidable. Neuland’s Bonthapally site already houses an R&D centre with roughly 360 scientists and pilot-scale analytical capability built up over years of clinical-stage peptide work — infrastructure that plausibly explains why this company, rather than a newer entrant, is making the commercial-scale leap first.
For Indian policymakers and industry bodies, the editorial question posed by these developments is sharper than it may first appear: does India’s biologics strategy default to attracting more capacity investment of the kind Samsung’s acquisition represents, or does it actively cultivate homegrown players capable of Neuland’s kind of forward capital commitment into complex modalities? The two are not mutually exclusive — multinational-owned facilities on Indian soil still generate employment, technology transfer and export revenue — but they carry very different long-run implications for where value, pricing power and process intellectual property ultimately accrue. A facility fully owned and commercially directed by an Indian company captures far more of the eventual upside than one absorbed into a Seoul-headquartered platform, however capable its India operations remain.
As global sponsors continue to reallocate manufacturing budgets away from small molecules and toward peptides and ADCs, the next eighteen months of capacity announcements, both organic and acquisitive, will offer a clearer answer than any policy white paper could. What is already evident is that the window for India to decide which kind of CDMO power it wants to be — subcontractor at scale, or genuine biologics innovator — is narrowing as global capital moves faster than domestic capability-building typically can.
– Srikanth Amirapu
